On Tuesday, the benchmark equity indexes in the United States experienced a slight downturn as investors awaited the release of the minutes from the Federal Reserve's monetary policy meeting held in July. This much-anticipated release is scheduled for Wednesday, adding an air of suspense to market activities. The Nasdaq Composite faced a setback, dropping by 0.3%, ultimately closing at 17,816.9.
Meanwhile, both the Dow Jones Industrial Average and the S&P 500 saw declines of 0.2%, finishing at 40,835 and 5,597.1, respectively. Among various sectors, energy witnessed the largest decline, plummeting 2.7%, while the consumer staples sector managed to lead the gainers with resilience amidst the volatility. In its meeting at the end of the previous month, the Federal Open Market Committee (FOMC) made the decision to maintain its benchmark lending rate steady at a range of 5.25% to 5.50%.
This marks the eighth consecutive month without a rate hike. The committee articulated that inflation remains "somewhat elevated," even though it has shown signs of easing over the past year. Interest rates began increasing in March 2022 as a measure to combat rising inflation, with the most recent hike occurring in July 2023.
Consequently, market watchers are turning their attention to comments from Fed Chair Jerome Powell, who is set to speak on Friday at the annual economic symposium in Jackson Hole, Wyoming. Investors will be keen to glean insight regarding the prospects of monetary easing from his remarks. According to the CME FedWatch tool, there is currently a 70% likelihood that the FOMC will implement a cut of 25 basis points at its upcoming meeting next month, while the odds skew toward a more aggressive 50-basis-point reduction. In aspects of fixed income, the US two-year yield fell by 7.2 basis points to 4%, while the 10-year rate dipped by 4.9 basis points to 3.82%, reflecting ongoing adjustments in market expectations based on forthcoming economic data. Turning to corporate news, Boeing ($BA) saw its shares tumble by 4.2% by the close of the market, marking the steepest decline among Dow constituents and weighing heavily on the S&P 500.
This downturn was attributed to the planemaker's announcement of a pause in the testing of its 777X aircraft, following the discovery of unexpected performance issues with structural components during routine maintenance. In contrast, Lowe's ($LOW) revised its full-year outlook downward, citing lower-than-anticipated sales in its do-it-yourself segment amid a challenging macroeconomic backdrop.
The home improvement retailer's fiscal Q2 results showed a year-over-year decline, resulting in a 1.2% decrease in its share price. On a brighter note, Palo Alto Networks ($PANW) emerged as a standout performer on both the S&P 500 and the Nasdaq, with shares rising 7.2%. This surge followed the company's surprising report of increased fiscal Q4 earnings, driven by revenue that exceeded expectations, thus bolstering investor confidence. Another company making waves in the health sector, Eli Lilly ($LLY), announced on Tuesday that its drug Tirzepatide has "significantly" reduced the risk of progression to type-2 diabetes among obese or overweight adults, as per data from a comprehensive three-year study.
This positive development led to a 3% rise in its shares, placing Eli Lilly among the top gainers on the S&P 500. In commodity markets, West Texas Intermediate crude oil retreated by 0.7%, resting at $73.82 per barrel. In precious metals, gold and silver experienced slight gains, with gold rising 0.5% to $2,553.10 per troy ounce and silver increasing by 0.6% to $29.48 per ounce..